ICE Benchmark Administration (IBA), a subsidiary of ICE , was chosen to provide a physically settled, electronic and tradeable auction for what will become the LBMA (London Bullion Market Association) Gold Price.

Friday's move to electronic auctions should repair outside perceptions of London's role in the market, damaged by the one known case of abuse at Barclays, Adrian Ash, head of research at online dealer BullionVault.com, said.

In May last year, the Financial Conduct Authority (FCA) fined Barclays 26 million pounds (S$53 million) for failures in internal controls that allowed a trader to manipulate the setting of gold prices. Other "fixing" banks came under the scrutiny of regulators.

"Can we guarantee there is never going to be manipulation? No. But the surveillance is strong with (an) audit trail and regulation is strong," Finbarr Hutcheson, President of ICE Benchmark Administration Ltd, said.

Six institutions will still submit orders during the process, as they currently do.

The four current providers of the gold "fix", Barclays, HSBC, Bank of Nova Scotia and Societe Generale will be among them, Mr Hutcheson said, without disclosing the names of the two new ones.

The issue around participation has gained importance due to the current regulatory environment, which aims to promote transparency and inclusion during the setting of financial benchmarks used by customers around the world.

"Not everybody realises the level of commitment that participating in a benchmark requires, that's why the list (of participants) you have today is shorter than envisaged," a bullion banking source added.

The LBMA, which will retain intellectual property of the new benchmark, had said 11 entities intended to participate in the new mechanism from the start and Chinese banks were interested.

But Industrial and Commercial Bank of China, Bank of China International and China Construction Bank, which are ordinary members of the LBMA, will not be joining the new process, Mr Hutcheson said.

When Chicago Mercantile Exchange, jointly with Thomson Reuters, took over the administration of the silver benchmark in August, just three entities were able to join the electronic auction from day one. There are now six participants.

The London Metal Exchange, part of the Hong Kong Exchange has been running the platinum and palladium fixes from December, with four participants.

ICE said it has appointed an independent chairperson who will oversee the process, although it will look to develop an algorithm at a later stage.

Four ex-bankers have been appointed as chairs and will rotate in their duty in the initial six months, one source said.

Users of the current fix say they aren't expecting the new regime to bring a major change in how they do business. "For a dinosaur like me, it hasn't really changed a lot,"one precious metals trader said. "The market will carry on."